COMMODITY DERIVATIVES REGULATORS
PUBLISHGUIDANCE ON STRENGTHENING THE
SUPERVISION OF INTERNATIONAL MARKETS

Regulatory authorities and representatives from 15 jurisdictions
responsible for the supervision of many of the world's leading
commodity futures markets have today issued a Communiqué at a
meeting in Tokyo jointly chaired by the United States Commodity
Futures Trading Commission (CFTC), the Japanese Ministry of
International Trade and Industry (MITI) in conjunction with the
Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF), and
the United Kingdom Financial Services Authority (FSA).

The conference participants endorsed two guidance papers on best
practices in contract design and review, and in approaches to market
surveillance and information sharing. They agreed to commend these
papers to the relevant organizations in their home jurisdictions. The
papers set out a clear framework for regulatory cooperation, and for
the oversight of contract development and market activity. They
represent the first occasion on which the authorities responsible for
overseeing the commodity derivatives markets have agreed to
international benchmarks for the supervision of these markets, and
demonstrate the importance attached by the authorities to the
maintenance of market integrity and confidence.

The guidance establishes regulatory expectations with regard to the
transparency of trading practices. It recommends that market
authorities should be able to access sufficient information about
on-exchange and related cash and over-the-counter positions both to
identify dangerous concentrations of positions, and to evaluate the
functioning of the market. The regulatory authorities agreed to
cooperate in particular in sharing surveillance information about
large exposures. They also agreed to take active steps where possible
with their own governments to seek the removal of domestic legal or
other obstacles to obtaining and sharing such information.

During the conference the authorities agreed on proposals to amend the
Boca Raton Declaration on information sharing between futures markets
regulators in response to specific market events. The scope for
participation in the Declaration was increased. The authorities also
established emergency contact lists and agreed to keep these
up-to-date. They identified further areas of work, including in the
area of market manipulation, which they would refer to IOSCO for its
consideration. They also invited other authorities to support the
Communiqué.

MITI and MAFF also announced that they have become signatories to the
Boca Raton Declaration today.

Mr. Kouji Honda, Director General of the Food and Marketing Bureau,
MAFF, welcoming the delegations from participating jurisdictions,
said: "the successful conclusion of the group's work over
the last year marks a milestone in confirming the importance of market
surveillance with the context of the reform of commodity futures
markets, and also in ensuring their stable relationship with physical
markets."

Mr. Mitsuyasu Iwata, Director-General for Commerce and Distribution
Policy. MITI, welcoming the conclusion of the meeting, said:
"with the success of this work we shall be able to address market
manipulation and maintain market integrity very well. Our
international cooperation, including the sharing of information
between authorities, will create a strong foundation for the
development of commodity futures markets in each
jurisdiction."

CFTC Chairperson Brooksley Born, welcoming the Communiqué, said:
"Our efforts in the last year have brought together our
combined knowledge concerning the special supervisory needs of
commodity markets. I am pleased that we were able to reach a consensus
on concrete standards of best practices that set international
benchmarks to assist regulators and markets to meet these
needs." She also added, "I am delighted to welcome
MITI and MAFF as signatories to the Boca Raton Declaration."

FSA Chairman Mr. Howard Davies, welcoming the publication of the
guidance papers, said: "I am delighted to be here to play a
full part in achieving the goals we set ourselves in the programme of
work we launched a year ago. What we have accomplished is unique, and
of great significance for the maintenance of integrity and confidence
in the commodity futures markets. I am particularly please to
represent the newly created Financial Services Authority of the United
Kingdom in the successful completion of its first major global public
function."